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How I Bought A House At 21 -- And Why It Was A Mistake

In our Money Mic series, we hand over the podium to people with controversial views about money. Today, a certified financial planner shares how she bought a home when she was just 21—and why she now considers it a financial mistake.

I’ve been told my whole life that I’m so young. I skipped third grade, and I’m an only child, so I’m used to doing things before my time. When I bought a house at the age of 21, everyone was shocked–but I’d been planning it for a few years.

Even from a young age, I’ve tried to be thoughtful about money.

Before I had any idea what a certified financial planner (CFP®) was, I read “Smart Women Finish Rich” by David Bach. I was a theater major in college, and I was determined not to become a starving artist. So I started my Roth IRA at the age of 18, convinced that I needed to buy a house when I graduated from college.

The problem? While I was in college, I kept watching real estate prices go up, up and up.

My plan was to buy a one-bedroom condo, but my dad convinced me that I should at least have a yard and a garage. I ended up putting in an offer on a 1-bedroom, 1-bath home with a 2-and-a-half car garage. I had lovely gardens. A fenced-in backyard. And the basement was partially finished, so I was able to turn that into a second bedroom. I often joked that I had the smallest house on the block, with the biggest garage.

What It Was Worth Then … and What It’s Worth Now

I bought my house in 2005 for $189,000. In retrospect, I shouldn’t have taken out a mortgage that big. I was only making $32,000 a year, so I could only afford half of that! My then-boyfriend-now-husband was living with me, so we made it work.

It seemed like such a good idea at the time, but then the housing market crashed and things started to go down, down, down. The part of the city where I was living was nice, but as the economy started to tank, crime went up. My neighbor got jumped, and another one had his house broken into. I’m a city girl who never thought I’d want to move to the suburbs, but even I was ready to call it quits.

According to Zillow.com, at the height of the real estate market, my house was valued at $239,000; about a year ago, it had dipped to around $130,000.

Trying to Get Out

We were underwater on our home. Although we were willing to take a loss of up to $30,000, we just didn’t like the thought of it. After stressing over what to do, we heard that a friend of a friend needed a dog-friendly place to rent.

The stars had aligned.

We rented our house for roughly our monthly mortgage payment and our tenant signed a two-year lease. We agreed to pay the water/trash bill, so we are out about $100 a month. But that still feels a lot better than losing thousands at one time!

In the meantime, we moved in with one of my husband’s friends for a year, renting the upstairs of their big, beautiful house in the suburbs. A few months ago, we moved in with my in-laws; his mom was retiring, so paying rent would help them out financially, too. We are actually very happy living with my in-laws, which surprises a lot of people. Living with family isn’t a big deal for us—it’s more important to keep our fixed costs low and save for retirement and another eventual down payment.

What I Learned From All of This

At 26,I cemented my love of finance by becoming a certified financial planner (CFP®). It should go without saying that making a career out of advising people on their personal finances has given me a unique perspective on what I could have done better at the tender age of 21.

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